Alaska v. Andrus

The D.C. Circuit rules that the environmental impact statement (EIS) for the Department of the Interior's sale of leases for outer continental shelf (OCS) oil and gas exploration in the Gulf of Alaska fails to comply with the requirements of the National Environmental Policy Act (NEPA), but the court refuses to nullify the lease sale or enjoin exploratory drilling pending a fuller consideration of alternative OCS operating orders on remand. The court first determines that despite contrary recommendations from the Environmental Protection Agency (EPA) and the Council on Environmental Quality (CEQ) the Department of the Interior had discretion to proceed with the sale rather than waiting for the results of ongoing environmental studies. Because the recommended period of dely has almost lapsed, however, the court finds it unnecessary to decide whether the Agency's rejection of the alternative of delaying the sale represented a reasonable exercise of that discretion given the absence of a cost/benefit analysis and the determinations of EPA and CEQ that the lease sale was "environmentally unsatisfactory." The court concludes that the EIS failed to evaluate fully the Agency's draft OCS operating orders and gave inadequate consideration to possible alternative orders. Defendants-appellees are mistaken in contending that such orders are simply environmentally beneficial mitigation measures and therefore are exempt from NEPA's impact statement requirement because the Secretary's decision to proceed with the lease sale without delay was based on the premise of protective operating orders. The court declares that the impact statement also failed to consider the alternative of including termination clauses in the leases which would have allowed the agency to cancel particular leases if unforeseen environmental hazards were discovered. Contrary to appellees' contentions, the Secretary does have the authority under the specific terms of the Outer Continental Shelf Lands Act and his general managerial powers over the public lands to include such clauses in OCS leases offered for sale. Noting that there is a presumption in favor of injunctive relief in cases of NEPA noncompliance, the court nevertheless concludes that such relief is not required in this instance. The basic purpose of an injunction in such cases is to preserve the decision maker's opportunity to choose while the defects in the Agency's compliance with NEPA are remedied. In this case, a "particularized analysis" shows that the public interest favors the project's continuation and that the NEPA violations concern failures to investigate different methods of conducting the lease sale rather than the alternative of not holding the sale at all. Moreover, the OCS operating orders can be changed and made retroactively effective upon existing leases. Recognizing that there is a serious question as to the legality of retroactively inserting termination clauses into existing leases, the court nonetheless rules that vacating the lease sale and enjoining exploratory drilling would be inappropriate. The case is remanded to the Agency for consideration of alternative operating orders.